AN ACT RELATING TO THE CLEANUP OF LAKE CHAMPLAIN AND OTHER
STATE WATERS

It is hereby enacted by the General Assembly of the State of
Vermont:

Sec. 1. FINDINGS

The
general assembly finds that:

(1)
Vermont’s surface waters are vital assets that provide the citizens of the
state clean water, recreation, and economic opportunity.

(2)
Preserving and protecting the water quality of the surface waters of Vermont is
necessary to preserve the quality of life for the citizens of Vermont.

(3)
Lake Champlain does not comply with the Vermont water quality standards and has
been designated by the state as impaired due to phosphorus.

(4)
The federal Clean Water Act requires Vermont to develop a plan, known as a
total maximum daily load (TMDL) plan, for the cleanup of Lake Champlain.

(5)
Through adoption of the Lake Champlain TMDL and through implementation of the
Clean and Clear Action Plan, Vermont has committed to the restoration of the
water quality of Lake Champlain.

(6) Since 2004, a total of nearly $65 million in
state and federal funds has been made available to support the Clean and Clear
Action Plan.

(7)
Despite Vermont’s financial commitment to the cleanup of Lake Champlain, the
independent performance audit of the Clean and Clear Action Plan concluded that
there have been no significant reductions in phosphorus loads to Lake
Champlain, and there has been an actual increase in phosphorus loads during
implementation of the Clean and Clear Action Plan.

(8)
The audit of the Clean and Clear Action Plan also concluded that there is a
lack of coordination between programs funded under Clean and Clear, that there
are no requirements for programs funded under Clean and Clear, that few of the
programs funded by Clean and Clear track or measure phosphorus reduction
related to the programs, that there is a general absence of any quantification
of phosphorus reduction under the programs funded by Clean and Clear, and that
there is a lack of a clear objective for the Clean and Clear Program as a
whole.

(9)
Implementation of the Lake Champlain TMDL also lacks an accurate measure for
quantifying phosphorus reduction and has failed to date to reduce phosphorus
loads in Lake Champlain as a whole.

(10)
Vermont should reassert its commitment to the preservation of the water quality
of the state and to the cleanup of Lake Champlain by requiring the development
of a comprehensive plan to implement aggressively the Lake Champlain TMDL and
to improve coordination of the Clean and Clear Action Plan.

Sec. 2. Sec. 5 of No. 43 of the Acts of 2007 is amended to
read:

Sec. 5. 10 V.S.A. chapter
47, subchapter 6 is added to read:

Subchapter 6. Lake Champlain Water Quality

§ 1385. THE LAKE
CHAMPLAIN TOTAL MAXIMUM DAILY LOAD

PLAN

(a)(1)
The secretary of natural resources shall reopen the total maximum daily load
(TMDL) plan for Lake Champlain as it pertains to the waters of Vermont in order
to:

(A)
Adopt a new hydrologic base year to reflect the average phosphorus load
discharged to Lake Champlain between 1993 and 2004;

(B)
Allocate point source and non-point source load reductions on a subwatershed
basis; and

(C)
Ensure that the total annual phosphorus discharged by all wastewater
treatment facilities in the aggregate does not exceed the total phosphorus load
discharged to Lake Champlain by all wastewater treatment facilities in the
aggregate in 2006 and to adjust aggregate total phosphorus load allocations to
Lake Champlain accordingly; and

(D) Amend pollutant load allocations within the TMDL so
as to reduce point source and non-point source load allocations in order to
reasonably assure that the TMDL meets the Vermont water quality standards.

(2)
The amended TMDL shall be submitted to the U.S. Environmental Protection Agency
as required by 33 U.S.C. § 303.

(b)
In addition to the requirements of subsection (a) of this section, the
secretary of natural resources shall amend the Vermont-specific implementation
plan of the Lake Champlain TMDL to include a strategy for identifying and
targeting critical source areas for non-point source pollution in each
subwatershed. For the purposes of this subsection, “critical source area”
means an area in a watershed with high potential to release phosphorus to
surface or subsurface runoff to waters of the state.

(c) In amending the TMDL for Lake Champlain under
subsection (a) of this section and in amending the Vermont-specific
implementation plan of the Lake Champlain TMDL under subsection (b) of this
sectionsection 1386 of this title, the secretary of natural
resources shall comply with the public participation requirements of 40 C.F.R.
§ 130.7(c)(1)(ii).

§ 1386. IMPLEMENTATION
PLAN FOR THE LAKE CHAMPLAIN

TOTAL
MAXIMUM DAILY LOAD PLAN

(a) On or before January 15,
2010, the secretary of natural resources shall issue a revised Vermont-specific
implementation plan for the Lake Champlain TMDL. Beginning January 15, 2013,
and every four years thereafter, the secretary of natural resources shall amend
and update the Vermont-specific implementation plan for the Lake Champlain
TMDL. Prior to issuing, amending, or updating the implementation plan, the
secretary shall consult with the agency of agriculture, food and markets, all
statewide environmental organizations that express an interest in the plan, the
Vermont League of Cities and Towns, all business organizations that express an
interest in the plan, the University of Vermont Rubenstein ecosystem science
laboratory, and other interested parties. The implementation plan shall
include a comprehensive strategy for implementing the Lake Champlain total
maximum daily load (TMDL) plan and for the remediation of Lake Champlain. The
implementation plan shall be issued as a document separate from the Lake
Champlain TMDL. The implementation plan shall:

(1) Include or reference the
elements set forth in 40 C.F.R. § 130.6(c) for water quality management plans;

(2) Comply with the
requirements of section 1258 of this title and administer a permit program to
manage discharges to Lake Champlain consistent with the federal Clean Water
Act;

(3) Develop a process for
identifying critical source areas for non-point source pollution in each
subwatershed. As used in this subdivision, “critical source area” means an
area in a watershed with high potential for the release, discharge, or runoff
of phosphorus to the waters of the state;

(5) Develop a method for identifying and prioritizing
on public and private land pollution control projects with the potential to
provide the greatest water quality benefits to Lake Champlain;

(6) Develop a method of
accounting for changes in phosphorus loading to Lake Champlain due to
implementation of the TMDL and other factors;

(7) Develop phosphorus
reduction targets related to phosphorus reduction for each water quality
program and for each segment of Lake Champlain, including benchmarks for
phosphorus reduction that shall be achieved. The implementation plan shall
explain the methodology used to develop phosphorus reduction targets under this
subdivision;

(8) Establish a method for the
coordination and collaboration of water quality programs within the state;

(9) Develop a method for
offering incentives or disincentives to wastewater treatment plants for
maintaining the 2006 levels of phosphorus discharge to Lake Champlain;

(10) Develop a method of
offering incentives or disincentives for reducing the phosphorus contribution
of stormwater discharges within the Lake Champlain basin.

(b) In amending the
Vermont-specific implementation plan of the Lake Champlain TMDL under this
section, the secretary of natural resources shall comply with the public
participation requirements of 40 C.F.R. § 130.7(c)(1)(ii).

(c) On or before January 15,
2010, the secretary of natural resources shall report to the house committee on
fish, wildlife and water resources, the senate committee on natural resources,
and the house and senate committees on agriculture with a summary of the
contents of and the process leading to the adoption under subsection (a) of
this section of the implementation plan for the Lake Champlain TMDL. On or
before January 15, 2013, and every four years thereafter, the secretary shall
report to the house committee on fish, wildlife and water resources, the senate
committee on natural resources, and the house and senate committees on
agriculture with the amendments or revisions to the implementation plan for the
Lake Champlain TMDL required by subsection (a) of this section. Prior to
issuing a report required by this subsection, the secretary shall hold at least
three public hearings in the Lake Champlain watershed to describe the
amendments and revisions to the implementation plan for the Lake Champlain
TMDL. The secretary shall prepare a responsiveness summary for each public
hearing. Beginning January 15, 2013, a report required by this subsection
shall include:

(1)
An assessment of the implementation plan for the Lake Champlain TMDL based on
available data, including an evaluation of the efficacy of the implementation
plan;

(2)
An assessment of the hydrologic base period used to determine the
phosphorus-loading capacities for the Lake Champlain TMDL based on available
data, including an evaluation of the adequacy of the hydrologic base period for
the TMDL;

(3)
Recommendations, if any, for amending the implementation plan or reopening the
Lake Champlain TMDL.

(d) Beginning February 1, 2009
and annually thereafter, the secretary shall submit to the house committee on
fish, wildlife and water resources, the senate committee on natural resources
and energy, and the house and senate committees on agriculture a clean and
clear program summary reporting on activities and measures of progress for each
program supported by funding under the Clean and Clear Action Plan.

Sec. 3. Sec. 4 of No. 43 of the Acts of 2007 is amended to
read:

Sec. 4. AGENCY OF NATURAL
RESOURCES REPORT ON

IMPLEMENTATION
OF STORMWATER TMDLS

(a)
Beginning January 15, 2008, and every two years thereafter, the agency of
natural resources shall report to the house committee on fish, wildlife and
water resources, the senate committee on natural resources and energy, and the
house and senate committees on agriculture regarding agency progress in
establishing and implementing the total maximum daily load (TMDL) plan for Lake
Champlain. Beginning January 15, 2009, and every two years
thereafter, the agency of natural resources shall report to the house committee
on fish, wildlife and water resources and the senate committee on natural
resources and energy regarding agency progress in establishing and implementing
the TMDLs for the stormwater-impaired waters of the state. Prior to issuing
the reports required under this section, the agency of natural resources shall
hold a public hearing in the Lake Champlain watershed and each watershed
of a stormwater-impaired water for which a permit has been issued implementing
a total maximum daily load. The reports required by this section shall
include:

(1)
An assessment of the implementation plan for the TMDL based on available data,
including an evaluation of the efficacy of the implementation plan;

(2)
An assessment of the hydrologic targets of the TMDL based on available data,
including an evaluation of the adequacy of the hydrologic targets of the TMDL;

(3)
Recommendations, if any, for amending an implementation plan or reopening a
TMDL.

* * *

Sec. 4. AGENCY OF NATURAL RESOURCES STORMWATER TMDL

SCHEDULE

(a) On or before October 1,
2008, the secretary of natural resources shall submit to each municipality in
which a stormwater-impaired water is located and to the house committee on
fish, wildlife and water resources, the senate committee on natural resources
and energy, and the house and senate committees on agriculture a schedule for
the issuance of the implementation plans for the total maximum daily load
(TMDL) plans that the U.S. Environmental Protection Agency (EPA) has approved
for the

stormwater-impaired waters of the state. The schedule
shall include the proposed dates on which the implementation plan for each EPA‑approved
stormwater TMDL will be issued and a summary of the potential alternatives for
each implementation plan, including the funding options for each alternative.

(b) The report required under
subsection (a) of this section shall also include a schedule for the submission
of the remaining stormwater TMDLs to EPA for approval.

Sec. 5. 10 V.S.A. § 1264 is
amended to read:

§ 1264. STORMWATER MANAGEMENT

* * *

(e)(1) Except as otherwise may be
provided in subsection (f) of this section, the secretary shall, for new
stormwater discharges, require a permit for discharge of, regulated stormwater
runoff consistent with, at a minimum, the 2002 stormwater management manual.
The secretary may issue, condition, modify, revoke, or deny discharge permits
for regulated stormwater runoff, as necessary to assure achievement of the
goals of the program and compliance with state law and the federal Clean Water
Act. The permit shall specify the use of best management practices to control
regulated stormwater runoff. The permit shall require as a condition of
approval, proper operation, and maintenance of any stormwater management
facility and submittal by the permittee of an annual inspection report on the
operation, maintenance and condition of the stormwater management system. The
permit shall contain additional conditions, requirements, and restrictions as
the secretary deems necessary to achieve and maintain compliance with the water
quality standards, including but not limited to requirements concerning
recording, reporting, and monitoring the effects on receiving waters due to
operation and maintenance of stormwater management facilities.

* * *

(i)
A residential subdivision may transfer a pretransition stormwater discharge
permit or a stormwater discharge permit implementing a total maximum daily load
plan to a municipality, provided that the municipality assumes responsibility
for the permitting of the stormwater system that serves the residential
subdivision. For the purposes of this section:

(1)
“Pretransition stormwater discharge permit” means any permit issued by
the secretary of natural resources pursuant to this section on or before June
30, 2004 for a discharge of stormwater.

(2) “Residential subdivision”
means land identified and demarcated by recorded plat or other device that a
municipality has authorized to be used primarily for residential construction.

Sec. 6. 27 V.S.A. § 614 is
added to read:

§ 614. TRANSFER OF
STORMWATER DISCHARGE PERMITS TO A

MUNICIPALITY

(a)
The failure of the residential subdivision to obtain, renew, or comply with the
terms of a pretransition stormwater discharge permit shall not create an
encumbrance on record title to real property within the residential subdivision
or affect marketability of title of real property within the residential
subdivision, provided that:

(1)
The residential subdivision transfers a pretransition stormwater permit to a
municipality according to the requirements of subsection 1264(i) of Title 10;

(2)
Property owners within the residential subdivision record in the land records:

(A)
The deed or other legal document of conveyance of the stormwater system to the
utility; and

(B)
A notice indicating that the stormwater utility has assumed responsibility for
the permitting of the stormwater system located in the residential subdivision.

(b)
The definitions found in section 1264 of Title 10 and subsection 613(a) of this
title apply to this section unless otherwise indicated. For the purposes of
this section, “residential subdivision” means land identified and demarcated by
recorded plat or other device that a municipality has authorized to be used
primarily for residential construction.

Sec. 7. 24 V.S.A. § 4753 is amended to read:

§ 4753. REVOLVING LOAN
FUNDS; AUTHORITY TO SPEND; REPORT

(a)
There is hereby established a series of special funds to be known as:

(1)
The Vermont environmental protection agency (EPA) pollution control revolving
fund which shall be used to provide loans to municipalities, state agencies,
and the Vermont housing finance agency, for planning sewage systems and sewage
treatment or disposal plants as defined in subdivisions 3501(6) and 3601(3) of
this title, for constructing publicly-ownedpublicly owned sewage
systems and sewage treatment or disposal plants as defined in subdivisions
3501(6) and 3601(3) of this title, for planning or construction of certain privately-ownedprivately owned wastewater systems, and for implementing related
management programs.

(2)
The Vermont pollution control revolving fund which shall be used to provide
loans to municipalities, state agencies, and the Vermont housing finance
agency, for planning pollution control facilities, for constructing publicly-ownedpublicly owned pollution control facilities, and for constructing
certain privately-ownedprivately owned wastewater systems and
potable water supply systems.

* * *

(8)
The Vermont stormwater management fund which shall be used to provide grants
and loans to municipalities, pursuant to rules proposed by the agency of
natural resources and enacted by the general assembly, for planning, designing,
engineering, constructing, repairing, or improving infrastructure necessary to
protect the waters of the state from the adverse impacts of untreated
stormwater runoff. Funds may also be used to plan and establish a process for
managing stormwater within or among municipalities.

* * *

(d)
Funds from the Vermont environmental protection agency pollution control fund
and the Vermont pollution control revolving fund, established by subdivisions
(a)(1) and (2) of this section, may be awarded for:

(1)
the refurbishment or construction of a new or an enlarged wastewater treatment
plant with a resulting total capacity of 250,000 gallons or more per day in
accordance with the provisions of this chapter and section 1626a of Title 10;
or

(2)
the construction of stormwater management facilities as specifically or
generally described in Vermont’s nonpoint source management plan, and which are
necessary to remedy or prevent pollution of waters of the state, provided, in
any year in which the federal grant for the fund established in subdivision
(a)(1) of this section does not exceed the amount available to the state in the
2002 federal appropriation, no more than 1030 percent of that
year’s federal and state appropriations to that fund shall be used for the
purpose outlined in this subdivision.

* * *

Sec. 8. 10 V.S.A. § 1278 is amended to read:

§ 1278. OPERATION, MANAGEMENT, AND EMERGENCY RESPONSE

PLANS FOR POLLUTION ABATEMENT FACILITIES

(a) Findings. The general
assembly finds that the state shall protect Vermont’s lakes, rivers, and
streams from pollution by implementing programs to prevent sewage spills to
Vermont waters and by requiring emergency planning to limit the damage from
spills which do occur.

(b) Planning requirement.
Effective July 1, 2007, the secretary of natural resources shall, upon
renewalas part of a permit issued under section 1263 of this title,
require a pollution abatement facility, as that term is defined in section 1571
of this title, to prepare and implement an operation, management, and
emergency response plan for those portions of each pollution abatement facility
that include the treatment facility, the sewage pumping stations, and the sewer
line stream crossing.

(c) As of July 1, 2010, the
secretary of natural resources, as part of a permit issued under section 1263
of this title, shall require a pollution abatement facility, as that term is
defined in section 1571 of this title, to prepare and implement an
operation, management, and emergency response plan for each permitted
facilitythat portion of each pollution abatement facility that includes
the sewage collection systems. The requirement to develop a plan under this
subsection shall be included in a permit issued under section 1263 of this
title, and a plan developed under this subsection shall be subject to public
review and inspection.

(d) An operation, management,
and emergency response plan shall include the following:

(1) Identification of those
elements of the facility, including collection systems that are determined to
be prone to failure based on installation, age, design, or other relevant
factors.

(2) Identification of those
elements of the facility identified under subdivision (1) of this subsection
which, if one or more failed, would result in a significant release of
untreated or partially treated sewage to surface waters of the state.

(3) A requirement that the
elements identified in subdivision (2) of this subsection shall be inspected in
accordance with a schedule approved by the secretary of natural resources.

(4)
An emergency contingency plan to reduce the volume of a detected spill and to
mitigate the effect of such a spill on public health and the environment.

(c)(e) The
secretary of natural resources shall post publicly notice of an illegal
discharge that may pose a threat to human health or the environment on its
website within 24 hours of the agency’s receipt of notification of the
discharge.

Sec. 9. 10 V.S.A. § 6602(2)
is amended to read:

(2)
“Solid waste” means any discarded garbage, refuse, septage, sludge from a waste
treatment plant, water supply plant, or pollution control facility and other
discarded material including solid, liquid, semi-solid, or contained gaseous
materials resulting from industrial, commercial, mining, or agricultural
operations and from community activities but does not include animal manure and
absorbent bedding used for soil enrichment; high carbon bulking agents used
in composting; or solid or dissolved materials in industrial discharges
which are point sources subject to permits under the Water Pollution Control
Act, chapter 47 of this title.

Sec. 10. COMPOSTING FACILITY
REGULATORY REVIEW

(a)
The general assembly finds that composting is an important management technique
necessary for the existing and future management of solid waste in Vermont and
for the management of manure and agricultural wastes on farms. The agency of
natural resources, the natural resources board, and the agency of agriculture,
food and markets should work together to protect the environment, assure the
continued viability of composting facilities in the state, assure continued
composting on farms, and assure that the goals of this section are
accomplished.

(b)
Notwithstanding 1 V.S.A. §§ 213 and 214, until July 1, 2010, no composting
facility holding a permit under 10 V.S.A. chapter 159 issued after January 1,
2001 shall be required to obtain a permit or a permit amendment under 10 V.S.A.
chapter 151, except that a composting facility shall be required to obtain a
permit under 10 V.S.A. chapter 151 if:

(1)
development at the composting facility exceeds the scope of the composting facility’s
certification under 10 V.S.A. chapter 159, and the development is not
authorized by the secretary of natural resources under 10 V.S.A. chapter 159;
or

(2)
there is a substantial change at the composting facility, as it exists on the
effective date of this act, that would require a permit under 10 V.S.A. chapter
151, and the change is not otherwise authorized by the secretary of natural
resources under chapter 10 V.S.A. chapter 159.

(c)
A composting facility that holds a certification by the agency of natural
resources under 10 V.S.A. chapter 159 issued after January 1, 2001 shall be
allowed to continue operations until July 1, 2010 under the terms of the
composting facility’s existing certification, an amendment to the composting
facility’s certification, or an interim certification. Until July 1, 2010,
such a composting facility shall not be subject to any requirement of an order
under 10 V.S.A. chapter 159, 201, or 211 issued before the effective date of
this act that requires the composting facility to obtain a permit under 10
V.S.A. chapter 151 or that is contrary to an authorization, certification, or
requirement of the secretary under 10 V.S.A. chapter 159.

(d)
For the purposes of this section, “composting facility” shall mean a facility
engaged in the controlled biological decomposition of organic matter
through active management to produce, use, or sell a stable humus-rich material
but shall not mean sewage or septage or materials derived from sewage or
septage.

(e)
On or before July 1, 2008, the agency of natural resources shall convene a
study committee to review the existing regulatory requirements for composting
in the state and to recommend amendments or improvements to the existing rules
governing the construction, alteration, or operation of a composting facility.
The committee shall consist of:

(1)
the secretary of natural resources or his or her designee;

(2)
the secretary of agriculture, food and markets or his or her designee;

(3)
two representatives of the composting association of Vermont, appointed by the
association;

(4)
a representative of the Vermont League of Cities and Towns, appointed by the
league;

(5)
a representative of an interested environmental group, appointed by the senate
committee on committees;

(6) a representative from the Vermont association of
solid waste managers, appointed by the association;

(7) the state historic preservation officer or his or
her designee; and

(8) a representative of the natural resources board,
appointed by the chair of the board.

(f) The committee shall issue a
final report of its findings to the house committee on fish, wildlife and water
resources, the senate committee on natural resources and energy, and the house
and senate committees on agriculture by January 15, 2009. The report shall include:

(1)
Recommended rules for the construction, alteration, or operation of a
composting facility;

(2)
Recommendations for increasing public awareness of the benefits of composting;

(3)
Recommendations for increasing awareness within the composting community and
those interested in initiating a composting operation of the existing
regulations governing composting; and

(4)
The contact information of an individual or department at the agency of natural
resources that can assist interested persons in understanding and complying
with the agency’s regulations for composting.

Sec. 11. ANR REPORT ON
PHOSPHORUS REDUCTION INCENTIVES

On
or before February 1, 2009, the agency of natural resources, as part of the
report required under 10 V.S.A. § 1386(d), shall report to the house committee
on fish, wildlife and water resources, the senate committee on natural
resources and energy, and the house and senate committees on appropriations
with a status report on the development of incentives or disincentives
for wastewater treatment plants to maintain the 2006 levels of phosphorus
discharge to Lake Champlain.

Sec. 12. SUNSET

Sec. 10 (composting facility regulatory review) of
this act shall be repealed on July 1, 2010. A composting facility that has been
operated at any time between June 1, 1970 and July 1, 2010 and which
constitutes a development pursuant to 10 V.S.A. § 6001(3)(A), including a
composting facility where Act 250 jurisdiction has been formally determined,
shall be subject to jurisdiction under 10 V.S.A. chapter 151 as of July 1,
2010.